NCUA Warns CUs Over Triple DES Deadline
ALEXANDRIA, Va.-NCUA alerted credit unions last week about the impending deadline for making all of their ATMs compliant with the new encryption standards, known as Triple DES. The new standards, which use two encryption keys, were instituted by Visa and MasterCard to ensure the security of their networks. All new ATM installations have been required to comply with Triple DES since April 2002 and all existing ones will be required to comply with the new standards by Dec. 31, 2005. The primary responsibility for ensuring compliance lies with the ATM vendors and the individual owners, explained NCUA Chairman JoAnn Johnson. If a credit union chooses not to upgrade, their ATMs will no longer be able to communicate with the host or network system, rendering them useless, Johnson added.
Fannie Mae Reports Tepid Earnings Picture
WASHINGTON-A massive write-down on the value of its huge financial derivatives used to hedge interest-rate risk caused Fannie Mae to report tepid earnings growth of less than 1% for its second quarter, with net income of $1.1-billion, or $1.10 a share, compared to $1.1-billion, or $1.09 a share, for the same period last year. The slowdown from last year-s record mortgage originations was exacerbated by a $2 billion write down in the market value of the company's huge hedging portfolio for the quarter. In addition, Fannie reported a 22% decline in revenues on a core cash basis, to $3.3- billion for the quarter. The decline in revenue was tempered slightly by a $763-million fall in losses from the call and repurchase of outstanding debt.
Mass. Directors OK's For Plans
BOSTON-State lawmakers overwhelmingly approved a bill that will allow credit unions to provide insurance coverage for directors, as they now do employees. Both the House and Senate voted to override a veto by Gov. Milt Romney, enacting the measure into law. The override of the governor's veto now means that those board members who are denied group health insurance coverage by their insurance carrier will be permitted to obtain such benefits individually in a manner that is similar in type, scope, and cost of coverage as is offered to other plan participants of the credit union and to be reimbursed by the CU.
Another Utah SCU Now FCU
SALT LAKE CITY-Granite CU has received approval from NCUA to join the flight from state charter, fueled by the bankers' attacks. The $200-million credit union is the 12th credit union to flee the state system since 2002 then the decades-long fight with the bankers heated up to the point when the legislature almost passed a credit union tax. Since that time the state's six largest credit union, and eight of the top 10, have fled the state system, and two more state charters are in the process of doing so. Over the past two years, total credit union assets in Utah held by state charters has gone from 86% to just 22%.
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